Patna: The Bihar government and the NTPC on Tuesday signed a memorandum of understanding for handing over three power plants to the national power company on a 30-year lease.

The MoU was signed in the presence of chief minister Nitish Kumar, Bihar energy minister Bijendra Prasad Yadav, Raj Kumar Singh, Union minister of state (independent charge) for power and new & renewable energy, and senior officials of the NTPC and state power companies.

"The state would save Rs 875.06 crore every year owing to lower generation cost after handing over these power plants to the NTPC," said Pratyaya Amrit, chairman-cum-managing director, Bihar State Power Holding Company Limited.

"The benefit would be passed on to consumers."

These savings would come from the reduced power generation cost once the NPTC takes over the functioning of the three power plants.

The NTPC will set up its own teams to run the three plants. "Those posted at the three power plants would now be deputed in transmission and distribution companies," Pratyaya said.

Asked about the utility of the Bihar State Power Generation Company Limited in the wake of the ha-nding over the three generation units to the NTPC, Pratyaya said the generation company would look after work related to solar and hydro-electric power generation.

The state government had decided to hand over the three thermal power plants to the NTPC in a cabinet meeting on April 17 this year.

The Barauni Thermal Power plan, a fully owned subsidiary of Bihar State Power Generation Company, has two units of 110 MW each and under two more units of 250 MW each are to be set up there. Now, the NTPC will do the expansion work.

The second plant, the 610MW Kanti Bijli Utpadan Nigam Limited in Muzaffarpur district, is a joint venture between the NTPC and the Bihar power generation company.

The third plant, in Nabinagar, Aurangabad, is also a similar joint venture and has three production units of 660 MW each. Pratyaya said the MoU would come into effect from June 1.

"There is lack of resources in the state but reforms are being done and Bihar would scale new heights by such efforts," Nitish said about the power sector.

Union minister Singh called Nitish a ruler with vision.